June 10, 2011: Combined Heat and Power Unit Shipments to Total 8.5 Million by 2020

BOULDER, Colo. - Combined heat and power (CHP) units are playing an increasingly important role in delivering onsite electricity generation and heat for a variety of residential, commercial, institutional, and industrial applications. According to a new report from Pike Research, the global CHP market will enjoy a period of strong growth over the next decade, and the firm forecasts that more than 8.5 million CHP systems, mostly small residential units, will be shipped between 2011 and 2021.

“Combined heat and power applications provide an opportunity for end users to generate electricity and heat on a highly distributed and localized basis, reduce energy expenses, and ensure reliable power,” said research analyst Anissa Dehamna. “Moreover, in some cases, CHP can be integrated into smart grids.”

However, added Dehamna, several market conditions must coincide in order to make CHP units a reasonable alternative to the grid or even other self-generation technologies. These conditions include appropriate matching of thermal and electrical output to the customer’s needs, cooperation of utilities for interconnection and other implementation requirements, classification of CHP as “renewable energy” for inclusion in government programs (not necessary, but helpful), and relatively high thermal requirements (compared to electrical requirements).

Pike Research’s analysis indicates that the right factors are aligning in the market to create a significant growth opportunity for CHP over the next decade, and the firm forecasts strong growth in unit shipments and revenues between 2011 and 2021. Of the 8.5 million units forecast to be shipped during that period, Pike Research anticipates that more than 95 percent of the total unit volume will be micro CHP units for the residential market. However, due to the much higher average unit costs in the commercial, institutional, and industrial sectors, the revenue segmentation among the four major market sectors will be much more evenly distributed. Commercial market growth will be robust and will follow a similar pattern to the residential market, albeit at much lower volumes. The two most developed application groups for CHP are institutional and industrial, but growth in these groups will be moderated by high project costs and long lead times.

Publication date: 06/06/2011

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